Davies Insights – Women on Boards

Authors: Jennifer F. Longhurst, Carol D. Pennycook, Franziska Ruf and William M. Ainley

Corporate governance leaders in North America and abroad are facing pressure by regulators and other market participants to enhance gender diversity in public companies. While some progress has been made in the number of women holding public company leadership positions, that progress continues to be relatively slow. In Canada, gender diversity received particularly heightened attention in 2014 as a result of several developments. Most recently, these include the adoption of enhanced “comply or explain” disclosure rules requiring TSX-listed and other non-venture issuers to provide greater disclosure about director term limits and other mechanisms of board renewal and concerning the representation of women on boards and in executive officer positions.

Outside Canada, many jurisdictions have already adopted, or are considering adopting, different approaches designed to foster gender diversity in public companies, with some approaches being more aggressive than others. For example, Norway, Spain and France have adopted mandatory quotas or targets to accelerate the representation of women in leadership positions. Consistent with the approach recently adopted by Canadian securities regulators, Australia and the United Kingdom have opted for a voluntary disclosure approach over strict rules that, some argue, fail to account for the circumstances of each issuer and its board, and can result in the loss of qualified directors. In the United States, governance advocates have been closely watching developments in Canada and abroad, and we expect that they will continue to press the Securities and Exchange Commission and other federal and state regulators to take additional steps, including possible rule changes, to increase the representation of women in U.S. public companies.

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